Jack Wall (Kildare South, Labour)
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Question 231: To ask the Minister for Enterprise, Trade and Innovation his views in relation to a submission (details supplied); and if he will make a statement on the matter. [47534/10]

Dara Calleary (Mayo, Fianna Fail)
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A recent study entitled Review of Labour Force Competitiveness, undertaken by Forfás for my Department, concluded that while 4.9% of employees in Ireland (83,700) were earning €8.65 per hour or less in October 2007, it is likely that the national minimum wage actually influences the wage levels of another 26% of the labour force. On that basis it is estimated that the national minimum wage may affect the wages of all those within a range of 1.5 times the national minimum wage. The report is published on the Forfás website.

The Forfás report found that the national minimum wage impacts on sectors in different ways – sectors such as wholesale and retail, hotels and restaurants, and other services sectors tend to have significantly more workers engaged on or just above the national minimum wage than internationally trading sectors. While the sectors and occupations where the greatest job losses have occurred generally coincide with the sectors where the national minimum wage is most prevalent, these sectors have also experienced a major collapse in demand for their output.

An independent research report by academics David Neumark and William Wascher on the employment effects of minimum wages Neumark, D. and Wascher, W., Minimum Wages and Employment, Institute for the Study of Labor, Bonn. Germany, Discussion Paper Series IZA DP No. 2570, January 2007, cited by Forfás, found that a majority of international studies pointed towards the negative employment effects of minimum wages. Based on their review of those studies that consistently revealed a negative relationship between minimum wages and employment, Neumark and Wascher found that a 10 percent increase in the minimum wage typically reduces employment in the cohort studied by between zero to five percent. Forfás concluded in this context that a reduction in the national minimum wage would result in an increase in employment in the medium term rather than in the short term, although it is difficult to estimate how significant such an increase might be.

To this end, the Financial Emergency Measures In the Public Interest Bill 2010 provides for a number of amendments to the National Minimum Wage Act 2000 to give effect to the Government's decision to reduce the National Minimum Wage to €7.65 per hour. The Bill has passed all stages in the Dáil and is currently before Seanad Éireann.